Monday, May 15, 2017

The failure by Dato’ Seri Najib Razak to secure even any form of non-binding commitment from Dalian Wanda to acquire Bandar Malaysia brings the Ministry of Finance plans for the 495 acres of prime land back to square one.

The Prime Minister needs perhaps a lesson in sales strategy. An evidently desperate salesman trying to sell his family heirlooms is never going to succeed in closing a deal at inflated prices. While these Chinese developers may be cash rich, they are not stupid.

They know that the previous buyer – the Iskandar Waterfront Holdings (IWH) Consortium who had put it the purportedly best bid in December 2015 could not pay up the full RM7.41 billion it agreed to pay for a 60% stake in Bandar Malaysia.

And if Wanda knew that, why would they be so silly as to offer more than what was previously already the best bid Bandar Malaysia could solicit? What can Bandar Malaysia offer – other than being a sizeable piece of prime land in the middle of Kuala Lumpur, that would make it such an ‘irresistable buy’ for a foreign Chinese developer?

The answer which isn’t music to Dato’ Seri Najib Razak’s ears, is really “not much”. Hence the only reason why these Chinese developers would acquire Bandar Malaysia is if, they got a bargain price or if they are able to extract all sorts of financial incentives and tax exemptions from the Malaysian government to make their venture worth the while.

This then begs the question – what makes these Chinese developers so special that we should bend over backwards to grant them exclusive financial incentives and generous tax exemptions?

We are not talking about Huawei setting up a reseach and design centre in Malaysia. Or for that matter setting up a manufacturing plant to produce world-class electronic gadgets. We would bend over backwards for Huawei in this case because we have no expertise in the sector.

On the other hand, our experience with Chinese developers have left a bad taste in the mouth. They have not only single-handedly placed the Johor property development industry on life-support, they have brought with them their entire supply chain of contractors and sub-contractors from China.

Worse, investigations by Malaysiakini recently have proven the Chinese construction projects to have engaged thousands of illegal workers from China. They have demonstrated utter contempt for our laws.
Therefore, as the Ministry of Finance re-think the entire Bandar Malaysia development – the most important question to ask is, “why can’t Malaysian developers do the job?”

For example, a consortium comprising of SP Setia, Sime Darby and EPF stunned the global property markets with a winning bid for the London icon, Battersea Power Station in 2012. It is now a project with gross development value in excess of GBP8 billion and have won the prestigious London “Developer of the Year Award” in 2015. Last year, the development also won the London “Deal of the Year Award” after successfully snagging Apple as the largest office tenant which will take up 5,000 sq ft of space.

Malaysian developers are also regular winners at the International Real Estate Federation (FIABCI) World Prix D’Excellence Awards. They have included Sunway, IJM, YTL, UEM-Sunrise and many more. These developers are now expanding their portfolios not only in the regional countries such as Vietnam, China and Indonesia, but also to developed cities such London and Melbourne.

Why are our own developers not given a chance? Even if in the event that there is no one developer who is able to digest the entire 495 acres of land in Bandar Malaysia – the Ministry of Finance could always parcel out the development into multiple parts and phases. This will provide the perfect opportunity for the local players to compete to create the best value and designs for the respective carved segments.

The projects will be a massive boost to our local property development industry, stimulate demand for local construction and related-services and most importantly provide thousands of new job opportunities for ordinary Malaysians.

Sometimes we think too hard, travel far and wide in the pursuit for solutions, when really, the
answer is right in front of our very eyes.

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About Me

I was elected in March 2008, the Member of Parliament for Petaling Jaya Utara under the Democratic Action Party (DAP). I'm also the DAP National Publicity Secretary, as well as the investment liaison officer for the Penang Chief Minister based in the Klang Valley.

Before joining politics full-time in January 2007, I was the CEO and founder of a Malaysian IT company, publicly listed in Singapore. I divested all my shares in the company to be able to serve the community and take part in socio-political affairs of Malaysia.

I've always had faith that there has been a guardian angel looking after me all these while - my personal well-being, my education, my career. Some will call it "God's will", some "fate" while some others, "destiny". I strongly believe that it is time for me to repay the kindness and fortune showered on me by my family, the society and of course, not forgetting, my guardian angel. :-)